Unexpected tax bill this year? Don’t have the cash to pay it? Here are the pros and cons of paying with your credit card. Benefits include avoiding IRS penalties, paying the bill as you’re able, deducting any convenience fees next year, and earning those reward points your card offers. Drawbacks include the fees the IRS charges to pay with your credit card, possibly higher interest rates than the IRS would charge, and the impact on your credit score if you’re left without much available credit. To avoid the crunch next year, start setting aside cash now or lower your deductions on your W-9. Cash is best, but a low-interest credit card can be helpful in a pinch.
Read full article here: Pros and Cons of Paying Taxes with a Credit Card
Carrie Rattle is a Principal at BehavioralCents.com, a website for women focused on mind and money behaviors. She has worked in the financial services industry for 20+ years and hopes to inspire women to better prepare themselves for financial independence.